Carlyle Group Eyes Majority Stake in Indian Housing Finance Firm

Carlyle Group Inc. is in advanced discussions to acquire a majority stake in Nido Home Finance Ltd., a leading home mortgage firm based in Mumbai, according to sources familiar with the matter. The investment, expected to be around $300 million, is part of Carlyle's broader strategy to expand its footprint in the Indian financial services sector.

The talks are ongoing, and a final agreement has not yet been reached, the sources said. However, if the deal goes through, it will mark a significant move by Carlyle into the Indian housing finance market, a sector that has seen substantial growth in recent years.

Nido Home Finance Ltd. is currently owned by Edelweiss Financial Services Ltd., a diversified financial services company with a strong presence in various segments of the Indian financial market. Edelweiss has been exploring strategic partnerships to further grow its housing finance business, and bringing in a private equity firm like Carlyle could provide the necessary capital and expertise to scale up operations.

This potential investment by Carlyle follows a series of strategic moves by other major financial players in the Indian housing finance sector. For instance, Blackstone Inc. and Sumitomo Mitsui Financial Group Inc. have also made significant investments in the sector, recognizing its potential for growth and profitability.

Carlyle's interest in Nido Home Finance is not a new venture for the firm in India. Earlier this year, Carlyle sold its decade-old investments in PNB Housing Finance and Yes Bank Ltd., both of which were successful exits. These transactions have provided Carlyle with valuable insights into the Indian market and have bolstered its confidence in making further investments in the country.

Edelweiss, on its part, has been proactive in seeking partnerships to strengthen its housing finance business. During an earnings call in November, Group Chairman Rashesh Shah expressed the company's keen interest in bringing in a private equity fund to support its growth ambitions in the housing finance sector.

Carlyle's strategy in India is to write larger checks and take majority stakes in companies, aiming to build platforms that can consolidate and grow businesses. Amit Jain, Carlyle’s India head, highlighted this approach earlier this year, stating that the firm has invested approximately $8 billion in India over its 25-year history in the country.

The potential acquisition of Nido Home Finance by Carlyle is a testament to the growing interest of global investors in the Indian financial services sector, particularly in the housing finance segment. With the Indian economy showing resilience and a strong appetite for home loans, the sector is poised for continued growth, making it an attractive investment opportunity for both domestic and international players.